dependence on a small number of large customers, including two large automotive customers; dependence on automotive, appliance, commercial vehicle, computer and communications industries; international trade disputes resulting in tariffs and our ability to mitigate tariffs; potential impact from coronavirus outbreak; timing, quality and cost of new program launches; ability to withstand price pressure, including pricing reductions; ability to successfully market and sell Dabir Surfaces products; currency fluctuations; customary risks related to conducting global operations; ability to withstand business interruptions; recognition of goodwill impairment charges; abilities to successfully benefit from acquisitions and divestures; investment in programs prior to the recognition of revenue; dependence on the ability and price of materials; fluctuations in our gross margins; dependence on our supply chain; income tax rate fluctuations; ability to keep pace with rapid technological changes; breaches in our information technology systems; ability to avoid design or manufacturing defects; ability to compete effectively; ability to protect our intellectual property; success of Grakon and/or our ability to implement and profit from new applications of the acquired technology; significant adjustments to expense based on the probability of meeting certain performance levels in our long-term incentive plan; ability to manage our debt levels and any restrictions thereunder; and costs and expenses due to regulation, I'm sorry, regulations regarding conflict minerals.

At this time, I'd like to turn the conference over to Mr. Don Duda, President and CEO. Sir, the floor is yours..

Thank you, Tom, and good morning, everyone. Thank you for joining us today for our fiscal 2020 third quarter financial results conference call. I'm joined today by Ron Tsoumas, our Chief Financial Officer. Both Ron and I have comments, and afterwards, we will take your questions.

Before I comment, I would like to note that our fiscal third quarter accounting period includes 14 weeks versus 13 weeks for the same period of fiscal 2019, and 40 weeks for the nine-month accounting period ending February 1, 2020 versus 39 weeks for the same period of fiscal 2019.

Also, the fiscal 2020 year-to-date third quarter results include nine months of Grakon activity as compared to 4.5 months of Grakon activity in fiscal 2019 year-to-date results. To start, please turn to Slide 4. Methode's year-to-date revenue increased 10.8%.

Our net income increased 35.2%, and our diluted earnings per share increased 35% for the nine months ended February 1 of this fiscal year. On a non-GAAP basis, our adjusted net income increased 4.5% and adjusted diluted earnings per share is up 4.3%.

These values exclude expenses for initiatives to reduce overall costs and improve operational profitability, acquisition-related costs, including purchase accounting adjustments and long-term incentive plan accrual adjustments in the applicable periods.

As you can see on Slide 5, our year-to-date revenue performance, which includes the adverse effect from the UAW labor strike at GM, that occurred in our second quarter.

Year-to-date performance benefited from an extra 4.5 months of Grakon activity and benefited from our new program launches and higher sales volume with sensors and switches, which have offset the customer delayed launch in our TouchSensor unit, as well as negative effects from foreign currency exchange.

Our performance to date in our anticipated lower consolidated tax rate allows us to reaffirm our fiscal year guidance numbers as reported during our second quarter fiscal year 2020 earnings call, and is shown on Slide 6.

During the third quarter, new business wins and business development efforts in the Automotive and Industrial segments continue to capitalize on portable vehicle trends, including electrification, LED lighting and incorporation of sensors to augment safety.

We are very pleased with our bookings of approximately $105 million in new annual business thus far this fiscal year. Referring to Slide 7 in the quarter. Methode has been awarded the torque sensor and complex-insert-molded product for the power steering system of all-terrain sport recreation vehicle worth $12 million annually.

Our sensor detects the efforts the driver is exerting while steering the vehicle and allows the system to adjust its power steering assistance in real-time. We have secured additional steering angle sensor business from an automotive OEM for $4 million annually.

Our LED lighting solutions business continues to grow with several program wins, including overhead console lamp and puddle lamps and license plate lamps for automotive and strip lighting system for the interior lighting for a bus manufacturer.

Methode's Power Solutions Group continues to run electric vehicle and hybrid electric vehicle business, as well as new awards in the datacenter equipment space.

Moving on, I want to comment on the latest automotive trend of the center display increasing in size and moving to smart services with more control functions being integrated into the display itself, such as infotainment.

We anticipate in the future, there will be fewer interior designs using traditional buttons and knobs, and perhaps more importantly, we expect this trend will result in much lower average selling prices for any integrated center assembly that is awarded.

As it will be inappropriate for me to speculate about any of our customer-specific plans for their future platforms, and while we expect no effect on our business in the near-term, we want to mention that, based on our multi-year planning at this point, we expect this transition will indeed occur and expect that will be less integrated center stack units in our business mix over the next five years.

However, as we've done successfully in the past, Methode has evolved its business with new technology and products, such as our unique sensors, interior and exterior LED lighting, our power solutions for electric vehicles and we will continue to develop innovative user interfaces, such as overhead consoles digital clusters, etc.

Thus, we feel that going forward, our higher margin product mix will more than offset any potential decline in operating income from what we must now consider a legacy product. I believe the aforementioned year-to-date bookings demonstrates our success in these areas. Turning to Slide 8.

I'm excited to mentioned that our new engineering center located in Bangalore, India has been completed and our personnel moving from our previous location have settled in.

We constructed this 50,000 square foot state-of-the-art facility for our 165 associates, adding testing capabilities, as well as having space to house additional personnel as Methode's engineering needs expand with our business growth.

Moving to Slide 9, our sensor group continues with its development and commercialization of tow load sensor system based on Methode's magnetoelastic technology. Some key engineering assessments are now complete and we expect to supply the engineering samples to our customers over the next few months.

As noted previously, we are targeting light truck and commercial OEMs to implement the benefits that can be derived from this sensor when driving vehicles with trailers. In the third quarter at Dabir, we added eight new customers to completing six hospital evaluations and have three evaluations in process with several plan for the next quarter.

Also, our battery-operated Gen II controller should be available by the end of this fiscal year. As many of you are aware, our Hetronic business unit has been in litigation with a former reseller of Hetronics products. A jury trial conducted in Oklahoma City, where Hetronics International headquarters are located, concluded this week.

The jury deciding in our favor and ordered a compensatory and punitive damages of approximately $114 million. Obviously, the jury verdict is a great development that we are excited about.

While the amount of the verdict is substantial, the judgment isn't final, and we don't know whether there will be any adjustments to the amounts awarded by the jury as part of the final judgment or how long it will take for a final judgment be entered. In addition, defendants can appeal after the final judgment is entered.

Once we have final judgment, we will work with counsel to implement the verdict and begin collection efforts. So, I caution, there is no guarantee that the Company will be able to collect or win, particularly in light of the fact that all of the defendants are located outside the United States.

Moving on, and to conclude, given the global macro environment and significant headwinds faced by Methode throughout this fiscal year, I am pleased that our third quarter performance, largely based on organic growth fueled by new program launches and our sensor business, led to solid financial performance and aided by excellent cash generation, we continue to deleverage, reducing debt by over $100 million since the Grakon acquisition.

That said, we remain cautious and mindful of the coronavirus situation. At this point, I'll turn the call over to Ron, who will provide more detail on our financial results.

Ron?.

Thank you, Don, and good morning, everyone. As was mentioned in both the 10-Q and the press release, fiscal year '20 third quarter results include 14 weeks of activity as opposed to 13 weeks in the third quarter of fiscal 2019.

And fiscal year-to-date '20 third quarter results include 40 weeks of activity as opposed to 39 weeks in the fiscal 2019 year-to-date third quarter figures. Also, fiscal year '20 year-to-date third quarter results include nine months of Grakon activity as compared to 4.5 months in fiscal '19 year-to-date results. Please turn to Slide 10.

Third quarter sales increased 15.8% or $39 million to $285.9 million in fiscal '20 from $246.9 million in fiscal '19. Sales in the third quarter benefited from higher sales in the Automotive segment.

Foreign currency exchange continued to be a headwind as both the euro and RMB exchange rates were weaker than the prior year, reducing net sales in the quarter by $2.2 million. On a GAAP basis, third quarter net income increased $10.5 million to $41.2 million or $1.09 per share from $30.7 million or $0.82 per share in the same period last year.

Third quarter GAAP net income benefited from higher gross profit, lower interest in the amortization expense offset by higher income tax expense.

In addition, we realized benefits from initiatives to reduce costs and improve profitability taken in fiscal 2019, which included lower expense for those actions in the current fiscal year versus last fiscal year. Moving to margins on Slide 11.

Third quarter GAAP gross margins were higher but non-GAAP adjusted gross margins were flat year-over-year in fiscal '20. Third quarter GAAP gross margins benefited from increased Automotive and Sensor sales, while were negatively impacted by foreign currency translation and lower radio remote control and appliance product sales.

Non-GAAP adjusted gross margins exclude expenses for initiatives to reduce costs and improve profitability and purchase accounting adjustments in the applicable periods.

Third quarter GAAP selling and administrative expenses as a percentage of sales decreased 180 basis points year-over-year favorably impacted by lower expense for operational improvements, the benefit of those operational improvements, lower acquisition cost and lower stock-based compensation expense.

Non-GAAP selling and administrative expenses as a percentage of sales, which exclude acquisition-related costs, expense for operational improvements and related cost in the applicable periods, decreased 120 basis points year-over-year in the third quarter of fiscal '20. Moving to year-to-date margins on Slide 12.

Year-to-date GAAP gross margins improved by 90 basis points, but non-GAAP adjusted gross margins declined 20 basis points year-over-year. Gross margins were impacted by the UAW labor strike at GM, the negative impact of foreign currency translation and lower radio remote control and appliance product sales.

These items were partially offset by the benefit of a full-year of Grakon sales and increased sensor sales. Non-GAAP adjusted gross margins exclude expenses for initiatives to reduce costs and improve profitability and purchase accounting adjustments in the applicable periods.

Year-to-date GAAP selling and administrative expenses as a percentage of sales decreased 290 basis points year-over-year, positively impacted by the lower expense for operational improvements, the benefit of those operational improvements, lower acquisition costs, lower stock-based compensation expense and by selling and administrative expense attributable to Grakon, which is lower as a percentage of sales than Methode as a whole.

Non-GAAP selling and administrative expenses as a percentage of sales, which excludes acquisition-related costs, expense for operational improvements and stock-based compensation adjustments, slightly decreased by 30 basis points on a year-to-date basis. Shifting to EBITDA on Slide 13.

The Company generated $58.7 million in the first - in fiscal '20 third quarter versus $43.1 million in the same period last year.

Adjusting for expenses for initiatives to reduce overall costs and improve operational profitability and acquisition-related costs in the applicable periods, third quarter fiscal 2019 adjusted EBITDA was $49.5 million, compared to $59.8 million in the current period. The increase is primarily attributable to higher gross profit during the period.

Moving to year-to-date EBITDA on Slide 14. The Company generated $152.6 million in fiscal '20 versus $109.1 million in the same period last year.

Adjusting for expenses for initiatives to reduce overall costs and improve operational profitability, acquisition-related costs, and stock-based compensation accrual adjustments in the applicable periods, fiscal '19 adjusted EBITDA was $137.6 million, compared to $154.2 million in the current year period.

The improvement is primarily attributable to higher EBITDA from Grakon nine months of activity versus 4.5 months, and new product launches, partially offset by the adverse impact from the UAW labor strike at GM. A few other financial items to review.

Year-over-year intangible asset amortization expense in fiscal '20 increased $3.2 million, or 28.8%, to $14.3 million due to amortization expense related to the Grakon acquisition, partially offset by lower amortization in the Interface segment.

In fiscal '20, we invested approximately $35 million in capital expenditures, mainly to support programs and launches in North America and Europe and our facility expansion in India. Year-to-date depreciation expense for fiscal '20 was $21.7 million. Our year-to-date tax rate of 14.1% benefited from the favorable adjustments due to U.S.

Tax Reform from IRS regulations that were issued in December 2019. Excluding this impact, our year-to-date tax rate would have been approximately 17%. We anticipate the tax rate for the fiscal year to be approximately 16% assuming no additional discrete items in the fourth quarter. Let's move to Slide 15. Free cash flow for fiscal '20 was $94.4 million.

As shown on Slide 16, we view some of our free cash flow to pay down debt. We paid down nearly $36 million in debt since the beginning of the fiscal year, and since the acquisition of Grakon, we've reduced our gross debt by $101 million.

We ended the quarter with $80 million in cash and our debt-to-EBITDA ratio, which is used for our bank covenants, stands at approximately 1.3. Please move to Slide 17 to look at our key drivers to our anticipated EBITDA performance for fiscal '20.

Looking at the EBITDA base on our $155 million of EBITDA in fiscal '19 and adding the EBITDA from a full-year of Grakon, which is approximately $25 million; adding EBITDA from new Automotive and laundry program launches of about $16 million; adding back the one-time cost we incurred in fiscal '19 for initiatives to reduce costs and improve profitability of about $11 million; adding back the one-time cost we incurred in fiscal '19 for acquisitions and restructuring of about $29 million; and increasing our anticipated government grant income by $4 million; and subtracting the net impact from the UAW labor strike at GM of approximately $7 million; and subtracting the impact of the loss of EBITDA from reduced passenger car sales and other items, which we estimate to be around $12 million.

At this juncture, we believe there are more headwinds than tailwinds in the fourth quarter of fiscal '20, including the potential impact of coronavirus. In conclusion, I'll finish up my remarks with guidance. Please turn back to Slide 6.

As a reminder, the guidance ranges for fiscal '20 are based upon management's expectations regarding a variety of factors and involve a number of risks and uncertainties, which have been detailed in this morning's release, Form 10-Q and our fiscal '19 Form 10-K.

As we announced this morning, we reaffirm fiscal '20 sales guidance in the range of $1.1 billion to $1.13 billion; pre-tax income in the range of $150.3 million to $164.3 million and earnings per share in the range of $3.25 per share to $3.55 per share.

For fiscal '20, we are estimating capital investment to be in the $45 million to $50 million range and depreciation and amortization to be between $49 million and $50 million.

Finally, we expect fiscal '20 free cash flow, as defined as net income plus depreciation and amortization less capital expenditures, to be between $122 million and $136 million. Don, that concludes my comments..

Thank you very much. Tom, we are ready for questions..

[Operator Instructions] We'll take our first question from David Leiker with Baird..

This is Erin Welcenbach on for David. So my first question relates to just thinking about the cadence of the platform change over that one of your key customers is seen. I realize that's likely going to hit more in kind of the fiscal 2021 timeframe.

But basically, just wondering if you can kind of help us walk through what the quarterly flow might look like given there are likely to be some large fluctuations in terms of that changeover..

Erin, generally we don't comment on the customer's rollout because we'd be divulging their plan. So I can't say a lot about that, but we're not forecasting any choppiness, other than the normal quarterly trend you'll see it in the holiday quarter. And so, we're not forecasting any unusual dips or spikes..

Okay. That's helpful. And then just on your comments about being bullish on being able to replace that center stack business.

I guess, can you just kind of talk about what specific product categories you're excited about, maybe what products you have in development in any traction on some of those new business wins that can point to concrete evidence of being able to start to build that pipeline?.

As I said in the prepared remarks, we booked $105 million of new annual business so far this year and we're not done yet. And those are in those areas I talked about, sensors and LEDs and electrification. That gives me great comfort that our strategy there has begun to pay off. And in auto there is definite life cycles to products.

Years ago we made a lot of money by being on wheel switches and modified some switches. And moving over to center consoles is that, as the wheel switches got very price sensitive, put it that way, to center consoles and now we're moving to overheads. I think we're up to eight programs on that now.

Our sensors, which has taken a long time to develop, but had a double effect on this quarter. And then what's under development is our magnetoelastic sensor or we're calling tow load to assist the driver or whether it be a light truck or a Class 8 truck in tolling trailer.

So - and I feel Methode has done what it does best and that is to apply technologies on to provider customer solutions..

Okay. That's helpful. And then just my final question is with respect to the Interface segment.

Can you talk about how that launch of the laundry program is going? It sounds like that may have been pushed a little bit on the timing standpoint, but obviously your commentary in your full-year guidance is that, you expect that to launch at previously communicated volume.

So just any additional perspective there?.

I think all we can say that it's launching slower-than-planned but we expect that it will get on track. Again, a slower launch than we - or slower launch than we anticipated. I think, again, I really don't want to comment on our customers launches. But again it's been slower..

We'll take our next question from Chris Van Horn with Friedman, Billings, Ramsey..

So, first on coronavirus.

Just any update to your supply chain or your customers over in Asia? And then have you put any of those impacts if they're material into your guidance?.

Any effect that we've seen and expect to see and we're down to two months in the quarter now is built in. We've had some air shipments, but have been offset by other corrective actions that we've taken. So, we feel for the quarter we're in pretty good shape. Some of the things that we monitor, our workforce, we're up to 80% attendance in Shanghai now.

And I think that was down to 60% at one point. And then in the Grakon facility in Dongguan at 75%. So we view that as a good sign. We had several weeks of Grakon material on the water. You can view that - maybe six weeks of supply, but then there is still time to get that into the pipeline in the U.S. or in Europe.

So we have a little bit of cushion there. We've taken all the normal actions that companies have taken like ban travel, we've severely limited domestic travel. Obviously, in China blows and wipes and mask and so on. And we are monitoring temperature of the work every four hours and we've isolated the - from cell-to-cell with a screen.

So we've done a lot to curtail the effect and our supply chain, we've had minimal interruption. I've got to caution that, if this gets considerably worse, at some point it's going to have effect and probably not in year-end but perhaps in the first quarter and we'll talk about that if necessary at that time..

Okay. Thanks. Thank you for that color. I just want to touch on orders and specifically this torque sensor award.

Is this - was this a competitive win? Was this a new technology to this ATV power system - power steering system? And then, how - where are you on - like - what's the TAM potentially for that market if this is successful?.

The TAM is probably hard one because you really need to look at what altering vehicles, what the market is for that. I would call it - I'll stop sort of calling it a niche, but it is a very specific application. We've had those before and we're on the Spyder motorcycle. I have been since its inception.

So, basically, the same technology being used for another vehicle. Competitive wise, there is probably isn't any competition. I probably shouldn't say that, but I don't think - we've seen something that e-bikes, but nothing that the performance as well as magnetoelastic.

Magnetoelastic - and then just in terms of the total market, it is application-specific. We've talked for years about transmissions. And again, that's been years and years and years of the development, we still don't have a platform there. But it is the same technology that's being used in the electric bikes. And again, the Spyder..

Okay. Got it. And then one of the themes, obviously, in auto is around electrification and I think you have some significant electric vehicle customers in your customer list.

And I'm just getting a sense is, are there adjacencies and other products that you're working on for that market? And how do you see that market evolving for you?.

It's evolving, but probably a little slower than everyone would think. There's a lot of start-ups. And we went to the consumer electronics, there is a lot of display and talk on the electrification. So that is a growing area for us, but it's not something that is going to transform us overnight, let's put it that way.

And we are well positioned with the busbar product, most people that require busbar, all the battery bank will contact us. We've talked about the major - I don't want to use the name, but the major EV manufacturer or all of their platforms.

Going forward, beyond the busbars, battery distribution modules, we are working on those for customers as a logical extension of our technology and our capabilities.

And we are into LED lighting and if you look at the power consumption in an EV, you want to keep it as low as possible, so things that we are doing in lighting, say, from a lensing standpoint, reducing the number of LEDs helps us secure the business because of - again, we're supplying the busbar, we understand the technology in the EV and can help them save energy..

Okay. So it sounds like the timing. It just depends on adoption of EVs and you do have some new products for that category..

Right. And I don't want to say that it's not growing. We can outpace growth by, as you said, new products. The more we do that, the larger that segment will become for us..

Yes. Okay. And you've cited Grakon as a good tailwind to margins here.

Is that the mix of the products? Is it some of the synergies, the cost controls that you were able to push through because of the acquisition? Is it volume related? What's kind of driving that?.

Probably the biggest - well, first of all, that is a higher margin business than auto. It's one of the reasons we're very interested in acquiring it.

But I have to give our Shanghai team, which manages the plant and - the Grakon plant in Dongguan, all sorts of credit, they've taken out millions of dollars of expenses just by doing what - again, what Methode does well, is manage its factory. So that's improving our margins.

And then while we can't point to anything large yet, bringing the Methode technology into the Grakon customers has been well received and we'll have to work through the product cycles and all the normal development protocols, but that will help us long-term.

Now, we have seen a reduction because of the Class 8 usage but that - we anticipate that will be relatively short-lived and any - really decline that is probably going to be offset by our new products and our margin improvements..

Okay. Great. Last one from me. It's nice to hear that the electronic trial might be coming to a close.

Any sense for the timing of the resolution of how you get paid and when you get paid on those damages?.

It's almost impossible to tell right now. I'm not filling out the deposit slip yet. But, obviously, we're going to pursue that. That lawsuit was - while it was expensive, it was necessary to preserve the business, which is what we've done and now we'll work to implement the verdict and collect our monies. But the timing, that's very difficult.

I really don't want to speculate on the timing. That's probably the best I can answer there..

And we'll take our next question from Ryan Sigdahl with Craig-Hallum..

Congrats on the really strong quarter and being able to maintain the guidance in this challenging environment..

Thank you..

Maybe to start just on the guidance, I mean, it seems like global auto production forecasts have been weakening almost by the day, plus you have coronavirus impacts. So, I guess, it seems like several material negatives versus the last quarter when you gave guidance.

So what are the - can you please explain the positive surprise, I guess, over the last couple of months and what the offset to those negatives are?.

As I was talking about with Chris, we've had very good success. We're taking cost out of the Grakon factory, which I would say, exceeded our expectations, maybe six months ago. Class 8 decline not as great as I think as some forecasted.

And yes, volumes are down in auto, but our new launches, which we pointed to, I think all year, the majority of those would start to ramp in the third and fourth quarters and we've seen that. Ron, is it….

Yes. I have a couple of things - to the margin expansion as well compared to last year consolidated margins are up year-to-date almost 1%, auto margins are - had maintained well in spite of the challenges in auto. Our Industrial Group margins have gone up quite a bit.

So, all of those things together and then the - a couple of the other things is, obviously, with our EPS and all that, we - our tax rate is a little lower than we thought it might have been when we came out last June.

We've done a nice job of mitigating tariffs and you start adding all of those things together, increased sensor sales, that product has increased year-over-year pretty significantly at higher margin, lot of know-how, a lot of IP.

So you add all those things together and they make a cumulative impact that is a very favorable to the Company operating in a difficult environment..

And I would also add that the new emission requirements in Europe, probably one is negative as they have them. So that's been helpful..

Great. I appreciate the color. Then switching over, can you elaborate on, I guess, why you guys think the center stack business will decline and it's now a legacy product? I mean, you're still in the process of ramping GM's next-gen kind of truck and SUV platform.

So it seems like there would be five-plus years of platform life, at least there on your primary award, as well as others..

We've been asked the question by investors and what we wanted to do was just get on the record what we think the trend is, and maybe not so much - the center consoles has buttons. Again, I went to the Consumer Electronics Show and I even bought a number of years, we've always have people will go, but they report back.

But if you look at the new AMGs, where the instrument cluster is really a couple of displays in glass that runs almost over to the passenger, very few buttons. So that stuff is more of a trend. And then as you take discrete functions, I'd say, the radio, more and more that's getting integrated into the center or into the display.

And we will make display nor do we intend to do so. The average selling price is going down. And that's a trend we wanted to get out in the market. I don't know, if there's - we're still launching and you're right. But it's something we're seeing..

That's maybe a good….

Is there a mega award out there? No. Because the average selling price is going down and the screen manufacturers like LG are really taking over the display. We make our money when we integrate, and there is a change that's happening over the next five years. Again, nothing tomorrow..

Yes. And that's maybe a good segue. I mean, will you continue to bid and focus resources on winning and keeping future generations with existing customers? I realize that's five-plus years away.

Or is it better to shift those resources and focus now on some of those other kind of higher margin, higher growth product categories that you mentioned earlier?.

Well, - okay, I'll give you both sides of that. We certainly are going to bid. We have our margin rules and when it falls below that, we'll bow out, because, as you said, the resources. We're better off in certain instances taking those resources and putting to electrification or in the sensors, and we've done that all along.

I mentioned earlier, we've got out of multifunction switches. So they just got too price sensitive. Well, the displays, if we don't make them in terms of make the margins that we want. But again, we're certainly going to bid on those items that I'm not saying we're getting out of it.

I'm just saying it's getting commodity like and I probably put it now, like we did in the legacy categories..

And then maybe last question on this, and I'll leave it. But is there any - I mean, you have your TouchSensor technology. I mean, it seems like screens and going away from knobs and switches could - you could benefit there.

Is there a way to integrate that and leverage that technology? And then secondly, you called out a digital cluster display last quarter, which seem like kind of a new and improved center stack and future product.

I guess, is there opportunity there? And how do you think about kind of those two technologies?.

Let me answer that one first. Very definitely there's opportunity there. Now, we are up against the screen manufacturers, but in certain instances, the OEM wants an integrator and we can make our money when we bring technology together for the customer.

But the customer certainly can go directly to screen manufacturer themselves and we've seen some of that happen. And the first question, the TouchSensor. No. Because TouchSensor is for discrete application. So one function one button. So that doesn't really apply to the displays in vehicle. That's not a technology that will be applicable for those chips.

Actually, not chips, aces and for the most part, it's built into the - well, it is now built into the screen chip..

And at this time, there are no further questions. Mr. Duda, I'd like to turn the call over to you for any closing comments..

Thank you, Tom. Well, thank everybody for listening, and have a good day. Goodbye now..

Ladies and gentlemen, this does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time, and have a great day..